Preparing for self financing Preparing for self financing

Peter RubackDeputy Director

Decent Homes and HRA ReformDCLG

Content of presentationContent of presentation Background to reform: announcements made so far July policy document Localism Bill Timetable Data requirements Valuation What you need to do now

Background to reformBackground to reform

Addressing problems of existing system Providing a sustainable settlement Better incentives for management, maintenance and asset management Model worked up with sector in HRA review Developed though CSR 2010 – borrowing cap and RTB receipts A generous settlement in the fiscal context Now in implementation/execution phase

July Policy Document July Policy Document

Final statement of policy ahead of consultation on draft determinations To include working drafts of determinations on valuations, payment

conditions, limits on housing debt and operation of the HRA ring-fence Opportunity for sector to look at the detail and the documents ahead of

the formal consultation on final values, so that:– any issues can be addressed ahead of the consultation on the determinations– councils know what the determinations will look like and can plan

Cipfa will issue further accounting guidance on depreciation, debt pooling and financial information around the same time

Localism BillLocalism Bill

Abolition of the HRA subsidy system in England

Mandatory settlement payments (both from and to central government)

Ability to re-open the settlement if there has been a change in the original factors used to determine the settlement payments: on record that this would only be used in exceptional circumstances

A limit on housing borrowing for each council –

TimetableTimetable

• Jun 2011: 2012 Base Data Return issued

• July 2011: Policy document

• Aug 2011: Deadline for completion of Base Data

• Oct 2011: Deadline for auditor certification of Base Data

• Nov 2011: Consultation on draft self-financing determinations

• Jan 2012: Final self-financing determinations issued

• Apr 2012: Start of self-financing and payment

Information required: 2012 Base Data Return Information required: 2012 Base Data Return

Stock numbers and archetype information

Voids and relets

Caps and Limits

Other Reckonable Expenditure

Information for self financing:

– HRA share of premiums and discounts

– Estimated expenditure on ORE headings from 2012/13 to 2041/2042

– Capital contributions to new build schemes part grant-funded by the HCA

– Demolitions, disposals and appropriations in 2011/12

– Planned demolitions 2012/13 to 2016/17

Drivers of ValuationDrivers of Valuation Based on the 2012 Base Data Return (October 2012).

– Stock numbers and archetype information– Caps and Limits

Additional data required for Self Financing:– Demolitions (& disposals in 2011/12)– ORE and Premiums information

RPI for September 2011 Forecast of the GDP deflator for 2012-13 Latest crime (July 2011) and area cost data (June 2011)

What authorities should be thinking aboutWhat authorities should be thinking about If making a payment to Government authorities should be examining what the

options are: internal resources or borrowing

• New skills required for debt management

• Speaking to Members – local authorities are responsible for funding their housing stock from their own incomes (including debt and borrowing)

• Thinking about long-term business planning- Identifying and disposing of hard to let uneconomical stock- Working with tenants to profile maintenance work in line with income